Can Employment Pass Holders Serve as Directors in Other Companies?
Employment Pass (EP) holders in Singapore often play pivotal roles in various companies. However, a common query arises: Can EP holders take up directorship positions in companies other than the one their pass is approved under? In this comprehensive guide, we delve into the regulations and processes surrounding this question.
Understanding the Guidelines
EP holders can indeed serve as directors in other companies, but with specific conditions. The Ministry of Manpower (MOM) mandates that such individuals must obtain a Letter of Consent (LOC) to do so.
Secondary Directorship in Related Companies:
In cases where the directorship is in a related company, such as a subsidiary, EP holders are generally permitted to take up such roles. MOM acknowledges the significance of these secondary positions in fulfilling the EP holder’s job responsibilities.
Related means that the Companies are relevant in terms of their business or shareholding Structure.
Secondary Directorship in Unrelated Companies:
If the directorship is in an unrelated company, the LOC application undergoes assessment by a sector government agency. Approval depends on whether the agency supports the application, ensuring alignment with industry development objectives.
Exceptions:
Employees of fund managers licensed by the Monetary Authority of Singapore (MAS) enjoy a streamlined process for taking on directorship roles for their investment vehicles, supported by MAS.
Process Overview
For companies intending to appoint EP holders from other related companies to their Board of Directors, the process typically involves:
- Application: The employer applies for the LOC, demonstrating the EP holder’s appointment to the directorship position.
- Approval: MOM evaluates the application, considering factors like company relation and alignment with the EP holder’s primary employment.
- Registration: Upon approval, the employer can register the directorship position with the Accounting and Corporate Regulatory Authority (ACRA).
Key Considerations for Employers:
- No Objections: Employers must ensure the EP holder’s current employer has no objections to the directorship.
- Approval from MOM: As directorship duties are considered work, MOM’s approval via the LOC is essential.
- Related Companies: MOM typically grants LOCs if the EP holder’s employer is related by shareholding to the appointing company, and the directorship aligns with the EP holder’s primary employment.
Conclusion
Navigating the regulations surrounding EP holders serving as directors in other companies requires understanding MOM’s guidelines and fulfilling necessary requirements. By obtaining the requisite LOC and adhering to the prescribed processes, companies can leverage the expertise of EP holders across multiple directorship roles, contributing to business growth and development.
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